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. 2022 Sep 29;12(1):14512.
doi: 10.1038/s41598-022-18686-8.

Economic estimation of Bitcoin mining's climate damages demonstrates closer resemblance to digital crude than digital gold

Benjamin A Jones  1 , Andrew L Goodkind  2 , Robert P Berrens  2
Affiliations

Economic estimation of Bitcoin mining's climate damages demonstrates closer resemblance to digital crude than digital gold

Benjamin A Jones et al. Sci Rep. .

Abstract

This paper provides economic estimates of the energy-related climate damages of mining Bitcoin (BTC), the dominant proof-of-work cryptocurrency. We provide three sustainability criteria for signaling when the climate damages may be unsustainable. BTC mining fails all three. We find that for 2016-2021: (i) per coin climate damages from BTC were increasing, rather than decreasing with industry maturation; (ii) during certain time periods, BTC climate damages exceed the price of each coin created; (iii) on average, each $1 in BTC market value created was responsible for $0.35 in global climate damages, which as a share of market value is in the range between beef production and crude oil burned as gasoline, and an order-of-magnitude higher than wind and solar power. Taken together, these results represent a set of sustainability red flags. While proponents have offered BTC as representing "digital gold," from a climate damages perspective it operates more like "digital crude".

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Conflict of interest statement

The authors declare no competing interests.

Figures

Figure 1
Figure 1
Global 7-days averaged daily electricity usage of mining activity (right axis) and coin exchange price in US$ (left axis) for Bitcoin (BTC). Data from January 1, 2016 to December 31, 2021 shown. Electricity usage is calculated based on network hash rate data downloaded from Blockchain Charts (https://www.blockchain.com/charts) and mining rig efficiency (see Methods section). Prices downloaded from Yahoo! Finance (https://finance.yahoo.com/cryptocurrencies/). All network hash rate and price data are supplied in the Supplementary Data.
Figure 2
Figure 2
Global estimates of Bitcoin (BTC) mining’s climate damages, CO2e emissions, and climate damages as a share of coin price. (A) Estimated climate damages ($/coin mined) and CO2e emissions (t/coin mined; bar chart) of BTC. A non-linear trend line has been fit to the damages per coin data to illustrate time trends (dotted line). (B) Climate damages as a share of the coin’s price for BTC. Values displayed are the 7-days running average. Climate damages per coin mined in (A) were divided by the daily market price of the coin and multiplied by 100 to put into percentage terms for calculation in (B). $100 t−1 damage coefficient used for CO2e emissions based on ranges in the peer-reviewed literature. Damages are in US$. Estimates span January 1, 2016 to December 31, 2021. See the Supplementary Data for emissions factors used and the climate damages data.
Figure 3
Figure 3
Bitcoin (BTC) mining’s climate damages as a share of coin market price (2016–2021), compared with full lifecycle analysis climate damages as a share of market price for other commodities (for a single year). Damages are expressed in percentage terms (% of market price). BTC climate damages only include energy use and emissions from running mining rigs, and do not include climate damages associated with cooling and manufacturing of mining rigs or other potential sources of carbon equivalent emissions. This makes estimated BTC damages a lower bound compared to the full lifecycle damages for the other commodities shown. Climate damages for the other commodities and economic products shown are calculated using lifecycle estimates from the peer-reviewed literature and US government agencies combined with publicly available price data. All commodity prices and lifecycle climate damage data are in the Supplementary Data.
See this image and copyright information in PMC

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